The IT market in Bosnia and Herzegovina totaled $187.38 million in 2007, representing year-on-year growth of 13.4% in U.S. dollars, according to a recent study by research company IDC. However, measured in local currency, the market expanded only 0.4% – due to U.S. dollar depreciation.

In 2007, the country’s market continued to grow moderately despite the fact that, for Bosnia and Herzegovina, 2007 was another year of robust economic development (particularly in industrial production), rising credit supply, and FDI inflow. Stagnation could be explained by poor IT investments on behalf of the state administration, a complex political situation, the structure of the country’s economy with prevailing IT non-intensive industries, and high unemployment.

Posting $42 in IT spending per capita in 2007, Bosnia and Herzegovina stood at 4.6% of the EU-27 average ($886). The country was far behind other countries in the region, such as Croatia ($275), Serbia ($103), and Slovenia ($455). At the same time, the country captured 6% of the combined IT spending of the eight countries of the Adriatic region.

Hardware shipments grew slower than the total IT market, despite the fact that PC shipments – particularly notebooks, which surged 48% in value last year – recorded the strongest growth. IT services and software-related revenues expressed in local currency increased slightly over the prior year. Such performance of these two market segments could be attributed to the declining procurements of the government and the bulk of the manufacturing sector. The major sectors that did show vitality in IT spending were telecommunications, financial services, and a limited number of manufacturing companies, most of them foreign-owned.

“Although IT services and software shipments recorded the highest market growth, hardware units still held almost 3/4 of the total market share,” said Boris Zitnik, Managing Director, IDC Adriatics. “This shows that Bosnia and Herzegovina, as a relatively young market, is still in the basic infrastructure phase.”

IDC projects that IT spending in Bosnia and Herzegovina will increase 10% on average over the next five years. Expenditures on IT products and services should surpass $306 million in 2012.

IDC’s Bosnia and Herzegovina IT Market 2008-2012 Forecast and 2007 Vendor Shares (IDC #ESP11P) presents the IT market in Bosnia and Herzegovina and forecasts total IT expenditures by technology category through 2012. The study contains market size information, vendor market shares, and growth projections for hardware and packaged software shipments, as well as IT services provision. It analyzes market trends and provides valuable insight into main drivers for individual market segments.